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View Poll Results: What tax bracket are you?
10 16 8.38%
15 50 26.18%
25 55 28.80%
28 30 15.71%
33 16 8.38%
35 7 3.66%
39.6 17 8.90%
Voters: 191. You may not vote on this poll

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Old 04-23-2015, 05:49 AM   #61
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Originally Posted by kaneohe View Post
This is an interesting example of how intuitions have to be trained before something becomes intuitive. Your example of a 15% marginal rate for a 10K addition of any kind of income works only because the 10K addition is less than the std deduction/exemption by just a bit. That means that if the 10K you added was ordinary income and you add just a bit more ordinary income , you will encounter a 25% marginal bracket and then if you add still more ordinary income, you will find the 30% marginal bracket. Thanks for the training.
And double thanks to you! This was how I thought it should work originally -- ie that extra qualified dividend income should NOT be the same as extra ordinary income. So basically in my example the standard deduction was consuming all my added income and the effect was masked. I will need to try to get my post #44 on the previous page corrected.

Revised moral of the story: I can't do these qualified dividend/LTCG calculations in my head yet. I will at least need to draw a picture (ie stacked bar graph style) showing income against tax brackets to aid my analysis and understanding.

-gauss
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Old 04-23-2015, 09:08 AM   #62
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Quote:
Originally Posted by gauss View Post

Revised moral of the story: I can't do these qualified dividend/LTCG calculations in my head yet. I will at least need to draw a picture (ie stacked bar graph style) showing income against tax brackets to aid my analysis and understanding.

-gauss
same here........well, I can do the calculations in my head .........at the risk of being wrong. In this case, I forgot about the 0% bracket since that's foreign to my normal experience. The other moral is perhaps: always double check against tax software/calculator. Yes, that stacked bar chart is very useful in helping make this intuitive.
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Old 04-23-2015, 09:16 AM   #63
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Federal 15% bracket, effective rate 10%; California effective tax rate, 1.75%.
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Old 04-23-2015, 11:05 AM   #64
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I'm glad you ran this poll; I hadn't pay much attention to page 2 of my 1040, besides looking at the refund amount. Apparently I managed to pay $0 last year for federal -- does that put me in a 0% bracket?


(I voted 10%)
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Old 04-23-2015, 11:26 AM   #65
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I'm in the 28% AMT bracket but also subject to the AMT exemption phaseout which gives me an effective bracket of 35% (I lose $1 of exemption for every $4 of income so that's an effective additional tax of one-quarter of 28%, so 7% + 28% = 35%).

Most people in AMT think they are in a 26% or 28% bracket, whereas in reality they are in a 32.5% or 35% bracket with the impact of the phaseout. Something you need to plan around.
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Old 04-23-2015, 11:50 AM   #66
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As a non-USian, I can't answer the poll. FWIW, in 2014, my overall tax rate was 5%.

As a Canadian, I am VERY pleased with this week's budget, which is a great deal for retirees. As of 2015, Canadians can now sock away $10,000 per year in a TFSA (tax free savings account; like a Roth, but you can withdraw anytime and recontribute the next year) and RRIF (registered retirement income fund) withdrawal rules have been relaxed. This will enable many people to avoid bumping up to the highest marginal tax rates following age 71.

http://www.scotiabank.com/ca/common/...2015_SB_EN.pdf
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Old 04-23-2015, 12:01 PM   #67
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We - or I should say DW- had an excellent year income-wise in 2014 and our marginal tax rate was 39.6%. This year we are expecting our income to be cut by 2/3, so we should go down a bracket or two or three.
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